20 August 2009
NEW DELHI: With the government declaring that almost half the country is already under drought, the Union cabinet will on Thursday consider a proposal to increase the minimum support price (MSP) for paddy to Rs 1,000 per quintal from the existing rate of Rs 850. The government will also mull whether to increase the support price for arhar (tur) dal from Rs 2,000 to Rs 2,300 and of moong dal from Rs 2,520 to 2,760.
The move on paddy is being considered in reaction to a severely hit crop. Not only has the sowing been substantially lower than last year but the low rainfall of August is estimated to have had a substantial impact on production as well. The situation on the pulses front has been as dismal with imports rising.
With these moves, the government would expect to convince farmers to invest more in the crops with the promise of a higher support price delivering a comparable price at harvest.
For a government that has reacted slowly to the drought, this would be but one of the arrows in its quiver to use.
Speaking to state food ministers on Wednesday, Union food minister Sharad Pawar said, "The shortfall in monsoon may result in shortfall in area coverage of paddy by about 5.7 million hectares as compared to last year and production of rice may reduce by 10 million tonnes. Some shortfall in production of oilseeds and sugarcane is also expected."
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